2000 (8) TMI 430 - AT - Central Excise

Summary

Issues:
1. Jurisdiction of the Commissioner to proceed with adjudication after settlement under the Kar Vivad Samadhan Scheme (KVSS).
2. Violation of Trade Notices by the Commissioner.
3. Imposition of penalty under Section 173Q and Rule 209A.

Analysis:

1. Jurisdiction of the Commissioner: The appellants challenged the Commissioner's decision to adjudicate and order the confiscation of goods and machinery despite settlement under the KVSS. The Tribunal held that once the matter was settled under the KVSS, the Commissioner lacked jurisdiction to initiate further proceedings. The designated authority had granted immunity against further prosecution or recovery, and the Commissioner's actions were deemed violative of the Trade Notices issued by the Board of Central Excise. The Tribunal referenced the Apex Court judgment in CCE v. H.M.M. Ltd., highlighting that penalties cannot be imposed once demands under a show cause notice have been settled. As the demands were resolved under the KVSS with immunity granted, the Commissioner was not empowered to proceed with the same notice, leading to the setting aside of the impugned orders.

2. Violation of Trade Notices: The Tribunal emphasized that the Commissioner should have considered the Trade Notices issued by the Board of Central Excise, particularly Trade Notice No. 75/98 and No. 89/98. Despite the appellants bringing these notices to the Commissioner's attention, the objections were overruled, and the proceedings continued. The Tribunal found the Commissioner's actions to be in contravention of the provisions of the KVSS and the Trade Notices, highlighting that the Commissioner should have refrained from initiating further proceedings once the matter was settled under the KVSS.

3. Imposition of Penalty: The imposition of penalties under Section 173Q and Rule 209A against an individual was also contested by the appellants. The Tribunal, considering the settlement under the KVSS and the immunity granted, concluded that the penalties imposed were unwarranted. Citing the Apex Court judgment and the provisions of the KVSS, the Tribunal set aside the penalties and emphasized that once demands were resolved under the KVSS, penalties could not be sustained under the same show cause notice. The Tribunal granted a full waiver of pre-deposit and stay of recovery, ultimately overturning the Commissioner's decision due to the lack of jurisdiction and violation of the KVSS and Trade Notices.